CARSON CITY, Nev. -- Tesla Motors CEO Elon Musk made it official Thursday: The automaker's first "gigafactory" for battery production -- key to its future and plans to produce a more affordable, mass-market car in three years -- will be built in Reno.

"Nevada is a real 'get things done' state," said Musk, who joined Nevada Gov. Brian Sandoval and scores of jubilant elected officials for the announcement. "It's a heck of a big factory. It will be shaped like a diamond, with solar panels on the roof. The factory will produce all of the energy that it needs through wind, solar and geothermal."

The announcement, made on the steps of the state Capitol, is a huge victory for Nevada, which is eager to diversify its economy and competed against far larger states with bigger budgets. Nevada, with a population of just 3 million, expects the gigafactory to pump $40 billion into the state economy over the next 20 years.

The gigafactory will add 6,500 jobs -- Nevada residents and veterans will get priority in hiring -- that will pay an average of $25 an hour. The 5 million-square-foot project is expected to employ 3,000 workers at peak construction. Musk did not say when it might start production, but construction can begin immediately.

Nevada is calling a special session of its legislature to approve an incentive package totaling more than $1 billion over 20 years to locate the battery plant near Reno.

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In return, Tesla will donate $1 million to fund advanced battery research at the University of Nevada, Las Vegas and contribute $37.5 million to the state's K-12 education system starting in 2018.

Musk, who flew in from London for the event, was mobbed after the formal news conference. During a brief exchange with journalists, he stressed that Nevada did not offer the largest incentive package.

"Incentives were one factor. The biggest single factor was time to completion," said Musk. "Unless the gigafactory is ready when we need to produce the mass-market affordable electric car, then the vehicle will be stalled. So time to execution is extremely important. Nevada was No. 1 on time to execution."

Tesla evaluated scores of potential sites in California, Arizona, New Mexico, Nevada and Texas before deciding on Nevada within the last few days.

"We're going to build this awesome factory that's truly going to be a wonder to behold," Musk said. "It's going to take battery manufacturing to a whole new level. I don't think there's anyone in Nevada who will regret this incentive package. It's going to pay for itself by an order of magnitude or more."